Newsosaur : Back to Basics

By:
Alan D. Mutter

Newspapers are so bad at digital publishing that they should just give up and focus on print.

That’s the bracing thesis of a recently published mini-book from journalism professor H. Iris Chyi of the University of Texas, who likens what she calls the “inferior quality” of online newspaper offerings to the ramen noodles gobbled by many a starving student. Her publication is titled “Trial and Error: U.S. Newspapers’ Digital Struggles Toward Inferiority” and can be found at tinyurl.com/pphdxp5.

Observing that newspapers have been experimenting with “new media” for the better part of two decades, Chyi marshals a raft of research to conclude “the performance of their digital products has fallen short of expectations.”

She urges publishers to “acknowledge that digital is not (their) forte” and abandon the “digital first, print last” strategy that has been widely adopted in the business.

“That is not to say that you don’t need to offer any digital product,” she adds, but “one may conclude that it is easier for newspapers to preserve the print edition than to sell digital products.”

Newspapers certainly have fallen short of expectations in the digital realm. Although interactive newspaper ad revenues have roughly tripled since $1.3 billion in 2003, the over-all digital advertising market has soared by more than sixfold since then.

But doubling down on print hardly seems to be a foresighted strategy when readers and advertisers increasingly are flocking to the digital media. We’ll get back to this in a moment. First, here’s Chyi’s take on where the industry went wrong:

“In retrospect, most U.S. newspapers outsourced their homework to business consultants such as Clayton M. Christensen, whose disruptive technology thesis served as the theoretical foundation behind the newspaper industry’s technology-driven approach. The problem is that most assumptions on the all-digital future have no empirical support. As a result, during nearly 20 years of trial and error, bad decisions were made, unwise strategies adopted, audiences misunderstood and product quality deteriorated.”

Pointing to research showing that people who like to read newspaper-y kinds of articles will pay substantial sums to spend quality time with print, Chyi argues that the digital version of the typical newspaper is “outperformed by its print counterpart in terms of usage, preference and paying intent.”

And she is right. Any publisher will tell you that print is more profitable that pixels.

The problem with ditching digital is that the number of readers and advertisers who value print has been steadily shrinking—and likely will continue to do so, owing to these seemingly irreversible market phenomena:

Tumbling print circulation. The print circulation of the nation’s newspapers has dropped by nearly half in the last 10 years, according to my analysis (tinyurl.com/ln642b7). While changes in the way publishers report their circulation have made year-to-year comparisons difficult, most anecdotal evidence suggests that print circulation is continuing to erode.

Dramatically aging readership. To pick one newspaper, the New York Times recently reported that the median age of its readers is 60 vs. 37 for the U.S. population, making its audience 1.6 times older than the population as a whole. The average life expectancy of a 60-year-old man is 21 years, while 70- and 80-year-old gents statistically have respective life spans of 14 and eight years. Even though some readers will live longer than the predicted average, the superannuated readership of newspapers suggests that significant numbers of loyal readers will begin dying off in the next 10 to 15 years. (Women statistically get an extra couple of years, but not enough to reverse the trend). Most publishers will tell you that the median readership of their newspapers is as senior as that of the Times.

Steadily contracting ad sales. Fully two-thirds of the print advertising at the nation’s newspapers has dried up since hitting a record high of $47.4 billion in 2005. Most of the publicly held publishers reported sales declines in the first half of this year, suggesting that revenues are on track to slide for the tenth straight year in 2015.

Declining economies of scale. Unlike websites that can serve one page or 100,000 pages at little incremental cost once they go live, print publishers must sustain substantial manufacturing and distribution investments in order to print a single paper. If circulation falls another 50 percent or print advertising slides another 67 percent in the next 10 years, will there be sufficient print subscribers and advertisers keep the business viable? This is the existential question facing the industry.

As poorly as the industry adapted to the digital age, it’s hard to imagine how newspaper companies can survive over the long term if they put their primary focus on print.

Alan D. Mutter is a former newspaper editor and Silicon Valley CEO who advises media companies on technology. He blogs at Reflections of Newsosaur (newsosaur.blogspot.com).